Health Information Management

Congress begins work on latest SGR fix

APCs Insider, January 23, 2015

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Congress' Subcommittee on Health met this week to begin discussing legislation that could significantly affect ICD-10, physician payments, and the healthcare industry at large.
The two-day meeting focused on deciding how to craft a permanent fix to the Sustainable Growth Rate (SGR) formula that determines Medicare reimbursement rates for physicians. Currently Congress must pass a patch bill each year to avoid Medicare payment cuts. Last year, those mandated cuts would have reduced physician reimbursement by 24%.
Last year's bill was updated, just before the March 31 deadline to avoid cuts, to include at least a one-year delay for ICD-10, forcing CMS to delay implementation until October 1, 2015.  Rep. Joe Pitts (R-Pa.), chair of the Subcommittee on Health, introduced that bill.
Barbara McAneny, M.D., chair of the AMA Board of Trustees; Richard Umbdenstock, president and CEO of AHA; and other experts in healthcare policy spoke at this week’s meeting.
The subcommittee hopes to update a bipartisan bill with a permanent SGR fix that made it out of the committee unanimously last year, H.R. 4015, the SGR Repeal and Medicare Provider Payment Modernization Act of 2014, and had a Senate counterpart, Last year's version of the bill, which preceded the patch bill, did not include any references to ICD-10, and it's unclear whether another delay will be considered as part of the new bill.
While McAneny mentioned ICD-10 in her testimony, she only discussed it among other regulatory burdens the AMA considers onerous on physicians, such as meaningful use and quality reporting. Thankfully, she didn't ask for any more ICD-10 delays.
ICD-10 proponents and opponents should be on the same side when it comes to fixing the SGR. With all the wildly different financial projections about ICD-10 implementation costs, the numbers are clear on how much Congressional inaction has cost the government, as McAneny cites in her testimony.
In November 2014, the Congressional Budget Office estimated the 10-year cost of enacting H.R. 4015 at $144 billion. The cost of Congress' 17 patches since 2003 is estimated at nearly $170 billion. By avoiding continually passing up the opportunity to fix the problem once and for all, Congress has wasted billions.
Having an annual deadline to pass a bill or cause massive payment reductions for physicians also allows Congress to sneak in items like the ICD-10 delay with little scrutiny. Last year, Congress members didn’t mention ICD-10 when debating the patch, despite industry opposition from those who were following the government's timelines.
As McAneny noted in her testimony Thursday, the House of Representatives only has 28 working days until the March 31 deadline. After years of partisan bickering and inefficiency, if this Congress wants to prove its different, passing SGR reform would be a major step.


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